Market Recap: RISI Crow's Construction Materials Cost Index


A price index of lumber and panels used in actual construction for May 10, 2013

*Western - regional species perimeter foundation; Southern - regional species slab construction.

Crow's Market Recap -- A condensed recap of the market conditions for the major North American softwood lumber and panel products as reported in Crow's Weekly Market Report.

Lumber: SPF lumber trading was sluggish, leading to lower prices. Lumber futures continued to push lower, and word of a significant overseas sale could not prod buyers off the sidelines. Weak market fundamentals continued to place downward pressure on Southern Pine lumber prices. Producers cited a greater number of inquiries from customers who remained cautious overall. Buyers continued to counter aggressively. Coastal species lumber producers could not sell much volume without lowering prices by double digits. Producers blamed imports from Canada for weak dry Doug Fir pricing. Green Doug Fir #2&Btr prices were more resilient to downward price pressure. Inland species lumber prices remained weak, although the speed of the descent seems to have slowed. Price concessions were more frequent and greater for narrows than wide widths. Carload quantities took more effort from producers to sell. Availability of Radiata Pine was limited as producers shipped to alternative markets. A few offerings of Shop grades from Chile were available and quickly bought. Ponderosa Pine industrial lumber producers continued to see good sales volumes and prices from domestic millwork manufactures. Moulding and millwork plants reported banner sales, with some saying they are booking record numbers of orders. Sales activity for Ponderosa Pine boards was steady for #3 and #4 but still quiet for #2&Btr. Steady sales of ESLP boards has kept pressure off those items. Eastern White Pine producers reported improved sales activity at mid-week. Melting snows generated a few more positive reports regarding improved Western Red Cedar sales at distribution and retail yards. Emphasis was placed on the need for field inventories, particularly at distribution yards, to flow to end users.

Panels: Those OSB producers booking enough business to give themselves some breathing room firmed up or slightly increased asking prices. Those still needing to book more business were receptive to slight counters. Secondaries sold contract wood below replacement costs. Producers and secondaries trying to move Southern Pine plywood volumes into a bearish market forced prices down sharply. Prices for items other than rated sheathing were not as weak. Although not enough to keep prices from drifting lower, Western Fir plywood producers reported an improved market. Sales activity picked up moderately, while the number of inquiries increased. Limited activity was reported at the mill level for Canadian plywood. Cash sales to Canadian customers were light. Some sales to U.S. customers were reported. Tighter particleboard availability in the East and South continued to shape the overall market. Price increases in the Southeast took hold. MDF demand remained robust, leaving those prices firm to higher.

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